This High-End Steakhouse Chain Just Raised Its Prices
Restaurants are feeling the pinch as inflation and the rising cost of labor put pressure on the industry. Steakhouses in particular are battling skyrocketing food costs due to beef suppliers that have been affected by drought, tight forage supplies, and other macroeconomic factors, according to the U.S. Department of Agriculture (USDA).
While most diners already know they are going to pay top dollar for a steak at Ruth's Chris Steak House, as of late March, they have been shelling out even more to dine at the chain. According to FSR Magazine, the company increased its prices by 3.4% several weeks ago, and the chain's CFO and COO Kristy Chipman expressed growing concern around beef prices, which she indicated were likely to get even higher by the summer.
However, the recent price hike has only affected certain menu items and hasn't yet deterred customers, Chipman added.
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Florida-based Ruth's Chris, known for serving top-quality cuts, has seen its fair share of ups and downs over the years. It shuttered 23 locations in 2020 due to pandemic woes before getting back on its feet last year with big plans for growth. At 151 locations, the chain is poised for expansion and anticipating opening five to seven new restaurants annually.
There are two Ruth's Chris locations currently under construction, one in Winter Park, Fla., and one in Woodland Hills, Calif. The company is planning to invest $50 million in new restaurants, remodels, relocations, and new technology.
Ruth's Chris' beef is certified Prime by the USDA and is sourced from cattle ranchers across the Midwest, according to the chain's website. Only 2% of all U.S. beef meets the standards for a Prime designation, making it a scarce commodity and more costly than other cuts. Ruth's Chris' steaks are also corn-fed and aged, which is said to lead to higher levels of marbling in the beef as well as a slightly sweeter taste.
According to Beef Magazine, far more than any other cut of beef, Prime cutout prices are 46.4% higher in price compared to the first seven weeks of 2022 than in 2020.